assets

All Asset Classes Getting Expensive

by

February 5, 2015

The head of a leading pension fund and respected LP player says that finding a good deal in current markets has become increasingly difficult. In a feature article on aiCIo.com, Ontario Teachers’ Pension Plan (OTPP) CEO Ron Mock was quoted saying that both infrastructure and PE investments are over-priced.

 

He said that high valuation multiples for businesses in PE, and a lack of discounts for regulatory risk in infrastructure deals , was going to make  yields harder for PE players to achieve. Elsewhere a similar view was expressed by the guardians of the New Zealand  Superannuation Fund, which is also a highly respected and transparent institutional investor.

 

The NZ fund advisors said publicly that while its returns in 2014 hit 13.89%,  well above its benchmark, this year will not be as good. The fund manager warned that yields may wane in 2015 because many asset classes are nearing “full value”. At the same time, global economic growth is spotty.

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